Cover of MoneyWeek magazine issue no 776, Friday 15 January 2016

Why you shouldn't fear China

14 January 2016 / Issue 776

Investors have been scared witless by the plunge in the Chinese stockmarket and the yuan. But keep things in perspective, says Andrew Van Sickle. There's no need to panic. Read this week's cover story here.

PLUS:
• The best funds to buy in a bear market
• Tips from a champion stockpicker
• David Bowie: The rebel who inspired a generation


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Excerpt

Podcast: China, the dollar, and dealing with the debt

In this week’s podcast, Merryn and John kick off with the only thing investors care about at the moment: China’s – and by extension everyone else’s – market crash. Plus, SocGen’s bear-fest, the strong dollar, and how the central banks look set to deal with the word’s debt.

Merryn Somerset WebbEDITOR'S LETTER

Merryn Somerset Webb

Snap up some gold miners

It’s been a rubbish start to the year for most investors. The S&P 500 had its worst week on record last week; the FTSE is down over 5% and the Shanghai Composite fell another 10% last week. Everyone’s getting nervous – to see just how nervous, read in this week’s issue about the RBS analyst who reckons you should be selling “almost everything” immediately.

MoneyWeek readers will be a little less hysterical than most. We’ve been warning of overvaluation across many markets and suggesting you hold more cash than usual for some time. And when we have suggested investing (in China, for example) we have been very clear that it should be for the long term. No house deposits in the stockmarket please. We also know that however bad things are, there is always something that looks cheap.

What is it right now? I had dinner with one of our favourite analysts, Chris Wood of CLSA, earlier this week and asked him that very question. We had just finished a rather gloomy conversation about the uselessness of monetary policy, the dangers of a ban on cash and the miseries of the London housing market, so I wasn’t expecting a particularly enthusiastic response. But I got one.

Gold miners, he said. This makes sense to us. Gold miners have, as a sector, fallen about as far as anything ever does (just over 70%). That’s the kind of fall that often marks a bottom.

• Read the full editor’s letter here: Snap up some gold miners